THE PESO traded sideways against the greenback on Monday with the United States on holiday and as the market looked out for developments related to the coronavirus disease 2019 (COVID-19) outbreak.

The local unit ended trading at P50.57 versus the dollar on Monday, weakening by a centavo from its Friday finish of P50.56.

The peso opened the session at P50.58 per dollar. Its weakest showing for the day was at P50.61, while its strongest was at P50.52 against the greenback.

Dollars traded rose to $971.5 million from $831.5 million on Friday.

“US is on a holiday today so not much data today… It was headline trading that followed COVID 2019 developments,” a trader said in a phone call on Monday.

“Due to additional cases reported since this morning, nag-weaken on emerging markets (emerging markets weakened),” the trader added.

US markets were closed in observance of Presidents’ Day.

Meanwhile, Reuters yesterday cited data from China’s National Health Commission which reported that the death toll in the mainland grew by 105 to hit 1,770 as of end-Sunday.

Confirmed infections in the country also increased by 2,048 to 70,548 cases, of which 10,844 people have already been treated and released from the hospital.

More than 94% of the new cases on Sunday were in the central province of Hubei, where the outbreak was born. The province also saw 100 deaths on Feb. 16.

Meanwhile, another trader said the slightly weaker local unit came on the back of recent dovish signals from the central bank.

“The peso slightly weakened amid dovish signals from BSP (Bangko Sentral ng Pilipinas) Governor [Benjamin E.] Diokno and as participants remained cautious amid lingering coronavirus concerns,” the second trader said in an e-mail.

On Friday, Mr. Diokno said the BSP may cut rates by another 25 basis points (bps) as early as the second quarter following the 25-bp reduction it announced on Feb. 6.

Rates on the BSP’s reverse repurchase, overnight lending and deposit facilities currently stand at 3.75%, 4.25%, and 3.25%, respectively.

The first trader said the peso-dollar market will continue to track headlines related to COVID-19 on Tuesday.

“The local currency might weaken on market positioning ahead of likely less dovish cues from the Federal Reserve policy meeting minutes due to be released later this week,” the second trader said.

For today, the first trader expects the peso to play around the P50.50-P50.80 band, while the second trader gave a forecast range of P50.50-P50.70. — L.W.T. Noble with Reuters